[0815test]

> Should the insurance just find a way to exclude massive, correlated events?

Why exclude when reinsurance can deal with them fairly easily? The insurance company sells bonds that only pay when the massive, correlated event doesn't occur. Financial markets like those, because while they may be 'correlated' in a sense, they are still largely uncorrelated with global growth trends - they're free diversification from their POV. And the "wisdom of the masses" takes care of the modeling - the bond price tells you (and the company) how likely the massive event is expected to be. No added model risk!